Long Term Care

Americans are living longer than ever, due in part to access to some of the best health care services in the world. In fact, the life expectancy for American women is just over 80 years of age - the longest ever recorded[1]. With this increase in life expectancy comes an increase in the amount of care required sustain longevity. In fact, it is estimated that 70% of persons over the age of 65 will require some type of long-term care services during their lifetime[2]. The national average cost for a nursing home stay in 2010 was $229/day[3]. Intimidating, right? It is, and for good reason. On average Medicare and Medicaid pay for almost 65% of all long-term care services[4]. The problem with that statistic is that to qualify for Medicaid you must spend down almost all of your assets. That means, in short, that you must exhaust all your resources (savings, property, retirement, etc) before qualifying for federal assistance.

Enter long-term care insurance. Historically, however, long-term care insurance has been very expensive. Additionally, if you did not purchase enough insurance you ran the risk of exhausting your coverage and having to spend down personal assets to qualify for Medicaid anyway. Many consumers were faced with the option of a) paying outrageous premiums for lifetime long-term care coverage, or b) going without long-term care insurance with the knowledge that they would lose everything if they needed long-term care. Then, in 2007, Idaho passed the Long-Term Care Partnership Act.

This act created the Long-Term Care Partnership Program that allows for a person to purchase long-term care insurance and protect some of their assets. In short, it works like this. A consumer purchases a long-term care policy that provides $100,000 worth of long-term care coverage. They enter a long-term care facility and begin to use their coverage. After two years the coverage is exhausted. The consumer now begins the process of asset spend down to qualify for Medicaid. However, there is now one difference. The first $100,000 of the consumer's assets are disallowed from the Medicaid qualification calculation. That is, the first $100,000 becomes invisible to Medicaid. Therefore, if the consumer had assets worth $150,000, he would only have to spend $50,000 to qualify for Medicaid. The remaining $100,000 is available to use as he pleases or pass along to family.

This has made long-term care insurance attractive once again because now it can provide some real protection no matter how expensive your stay becomes. Call or email us today to learn more about a long-term care insurance plan can help you pay your own way and pass along a legacy to your family.

[1]  Jiaquan Xu, M.D.; Kenneth D. Kochanek, M.A.; Sherry L. Murphy, B.S.; and Betzaida Tejada-Vera, B.S.; Division of Vital Statistics. (2010). Deaths: Final Data for 2007. National Vital Statistics Reports, 58(19), 6. url: http://www.cdc.gov/NCHS/data/nvsr/nvsr58/nvsr58_19.pdf
[2]  U.S. Department of Health and Human Services. (2011). National Clearinghouse for Long-Term Care Information: Understanding LTC. url: http://www.longtermcare.gov/LTC/Main_Site/Understanding_Long_Term_Care/Basics/Basics.aspx

[3]  U.S. Department of Health and Human Services. (2011). Costs of Care - Long Term Care Information. url: http://longtermcare.gov/costs-how-to-pay/costs-of-care/
[4]  Georgetown University. (2004). Georgetown University: Long-Term Care Financing Project: Who pays for long-term care? url: http://ltc.georgetown.edu/pdfs/whopays2004.pdf